MISSISSIPPI LEGISLATURE
2012 Regular Session
To: Ways and Means
By: Representative Perkins
AN ACT TO AMEND SECTION 31-17-101, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT THE POWERS OF THE STATE BOND COMMISSION IN CONNECTION WITH ANY STATE BONDS AUTHORIZED TO BE ISSUED BY AN ACT OF THE LEGISLATURE ARE LIMITED TO PERFORMING CERTAIN ADMINISTRATIVE AND PROCEDURAL FUNCTIONS RELATING TO THE ISSUANCE OF THE BONDS; TO AUTHORIZE THE COMMISSION TO PERFORM ANY OTHER POWERS AND DUTIES IN CONNECTION WITH ANY STATE BONDS AUTHORIZED TO BE ISSUED BY AN ACT OF THE LEGISLATURE THAT ARE SPECIFICALLY GRANTED TO THE COMMISSION IN THAT ACT OF THE LEGISLATURE; TO PROVIDE THAT THE COMMISSION IS NOT AUTHORIZED TO MAKE A DETERMINATION THAT ANY STATE BONDS SHOULD NOT BE ISSUED BASED ON THE COMMISSION'S EVALUATION OF THE RELATIVE MERITS OF THE PROJECTS BEING FUNDED BY THE BONDS OR THE APPROPRIATENESS OF THE POLICY OF ISSUING THE BONDS; TO PROVIDE THAT IF ALL OF THE CONDITIONS THAT ARE PRESCRIBED FOR THE ISSUANCE OF THE BONDS IN THE ACT OF THE LEGISLATURE AUTHORIZING THE ISSUANCE OF THE BONDS HAVE BEEN MET AS REQUIRED IN THAT ACT, THEN THE COMMISSION SHALL ISSUE THE BONDS AS PROVIDED IN THAT ACT; TO BRING FORWARD SECTIONS 31-17-1, 31-17-3, 31-17-103, 31-17-105, 31-17-109, 31-17-111, 31-17-123 AND 31-17-125, MISSISSIPPI CODE OF 1972, WHICH PROVIDE FOR THE CREATION OF THE STATE BOND COMMISSION, COMPOSITION OF THE COMMISSION AND CERTAIN POWERS AND DUTIES OF THE COMMISSION; TO BRING FORWARD SECTIONS 31-17-11 AND 31-17-13, MISSISSIPPI CODE OF 1972, WHICH PROVIDE FOR THE CREATION OF THE STATE BOND RETIREMENT COMMISSION AND DUTIES OF THE COMMISSION; TO BRING FORWARD SECTIONS 7-1-401 AND 7-1-403, MISSISSIPPI CODE OF 1972, WHICH PROVIDE FOR THE CREATION OF THE BOND ADVISORY DIVISION WITHIN THE DEPARTMENT OF FINANCE AND ADMINISTRATION AND THE POWERS AND DUTIES OF THE DIVISION; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Section 31-17-101, Mississippi Code of 1972, is amended as follows:
31-17-101. (1) There is hereby created a commission to be known as the "State Bond Commission" (hereinafter referred to as the "commission"), which shall consist of the Governor, Attorney General and Treasurer of the State of Mississippi. The Governor shall act as chairman of the commission, the Attorney General shall act as secretary of the commission, and the State Treasurer shall be treasurer of the commission. The successive incumbents in the Offices of Governor, Attorney General and State Treasurer shall succeed their predecessors as members of the commission upon assumption of their duties and the completion of their oaths of office. The powers of the commission shall be vested in and exercised by a majority of the members of the commission. The commission may delegate to one or more of its members, or to its officers, agents and employees, such powers and duties as it may deem proper, and may adopt rules for the conduct of its business.
(2) The powers of the State Bond Commission in connection with any state bonds authorized to be issued by an act of the Legislature are limited to performing the following administrative and procedural functions relating to the issuance of the bonds:
(a) Acting as the issuing agent for the bonds;
(b) Prescribing the form of the bonds;
(c) Determining the appropriate method for sale of the bonds;
(d) Advertising for and accepting bids or negotiating the sale of the bonds;
(e) Determining when the bonds are to be sold;
(f) Issuing and selling the bonds; and
(g) Doing any other things necessary and advisable in connection with the issuance and sale of the bonds.
In addition, the commission is authorized to perform any other powers and duties in connection with any state bonds authorized to be issued by an act of the Legislature that are specifically granted to the commission in that act of the Legislature.
However, the commission is not authorized to make a determination that any state bonds should not be issued, or to withhold the issuance of any state bonds, based on the commission's evaluation of the relative merits of the projects being funded by the bonds or the appropriateness of the policy of issuing the bonds. If all of the conditions that are prescribed for the issuance of the bonds in the act of the Legislature authorizing the issuance of the bonds have been met as required in that act, then the commission shall issue the bonds as provided in that act.
SECTION 2. Section 31-17-1, Mississippi Code of 1972, is brought forward as follows:
31-17-1. The State Bond Commission shall be composed of the Governor, the Attorney General, and the State Treasurer.
SECTION 3. Section 31-17-3, Mississippi Code of 1972, is brought forward as follows:
31-17-3. The State Bond Commission, with the approval and consent of the State Auditor of Public Accounts and the chairman of the State Tax Commission, is hereby authorized to purchase outstanding bonds of the State of Mississippi, retire such bonds, and pay the purchase price thereof out of any surplus remaining in the State Treasury at the end of any fiscal year, all in accord with the provisions of Sections 31-17-21 through 31-17-25. The State Bond Commission, with the consent and approval of the State Auditor of Public Accounts and the chairman of the State Tax Commission, shall determine the amount of bonds to be purchased, the maximum price to be paid therefor not to exceed par and accrued interest, and the date upon which it will receive proposals to purchase such bonds, all in accord with the provisions of Sections 31-17-21 through 31-17-25.
SECTION 4. Section 31-17-103, Mississippi Code of 1972, is brought forward as follows:
31-17-103. (1) For the purposes of offsetting any temporary cash flow deficiencies in the General Fund and to maintain a working balance in the General Fund, the commission is authorized at any time and from time to time to borrow money in an aggregate principal amount not to exceed seven and one-half percent (7-1/2%) of the total appropriation made by the State Legislature from the General Fund for the fiscal year in which such deficiency or deficiencies occur, issuing therefor notes as authorized hereunder. Notes may be issued from time to time as the proceeds thereof are needed. The notes shall be authorized by the commission and shall have such terms and details as may be provided by resolution of the commission; provided, however, each resolution of the commission authorizing notes shall:
(a) Describe the need for the proceeds of the notes to be issued; and
(b) Specify the principal amount of the notes or maximum principal amount of the notes which may be outstanding at any one (1) time, the rate or rates of interest or maximum rate of interest or interest rate formula (to be determined in the manner specified in the resolution authorizing the notes) to be incurred through the issuance of such notes, and the maturity date or maximum maturity date of the notes, which maturity date or maximum maturity date shall not extend beyond the last day of the third month following the end of the fiscal year in which the notes were issued.
(2) The commission may also provide in any authorizing resolution for the form of the notes (either fully registered form, bearer form or registered as to principal only form), denominations, place or places of payment (either within or without the State of Mississippi), registration provisions, exchange privileges and manner of execution (including the use of facsimile signatures and a facsimile of the seal of the State of Mississippi). Subject to the limitations contained in this section and the standards and limitations prescribed in the authorizing resolution, the commission, in its discretion, may provide for the notes to be issued and sold, in whole or in part, from time to time, and may delegate to the State Treasurer the power to determine the time or times of sale, the amounts, the maturities, the rate or rates of interest, and such other terms and details of the notes, as may be deemed appropriate by the commission, or the State Treasurer in the event of such delegation. The commission may also provide in the resolution authorizing the issuance of notes, in its discretion, but subject to the limitations contained in this section, (a) for the employment of one or more persons or firms to assist the commission in the sale of the notes, (b) for the appointment of one or more banks or trust companies, either within or without the State of Mississippi, as depository for safekeeping, and as agent for the delivery and payment, of the notes, (c) for the refunding of the notes, from time to time, without further action by the commission, unless and until the commission revokes such authority to refund, provided that in no event shall any refunding note be issued with a maturity date later than the last day of the third month following the end of the fiscal year in which the notes to be refunded were issued, (d) for the rating of the notes by one or more nationally recognized rating agencies, and (e) for such other terms and conditions as the commission may deem appropriate. In connection with the issuance and sale of notes as provided in this section, the commission may arrange for lines of credit with any bank, firm or person for the purpose of providing an additional source of repayment for notes issued pursuant to this section. Amounts drawn on such lines of credit may be evidenced by negotiable or nonnegotiable notes or other evidences of indebtedness, containing such terms and conditions as the commission may authorize in the resolution approving the same. The commission is authorized to pay all cost of issuance of the notes, including, without limitation, rating agency fees, printing costs, legal fees, bank or trust company fees, cost to employ persons or firms to assist in the sale of the notes, line of credit fees and charges and all other amounts related to the costs of issuing the notes from amounts available therefor in the General Fund or from the proceeds of the notes, in the discretion of the commission.
SECTION 5. Section 31-17-105, Mississippi Code of 1972, is brought forward as follows:
31-17-105. (1) The said notes shall be issued for the purpose of maintaining a sufficient working balance in the State General Fund. In effectuating the purposes of Section 31-17-101 et seq., the following procedures shall be followed:
(a) Immediately following the close of business on the last day of every calendar month, the State Fiscal Officer shall submit to each member of the State Bond Commission a certified statement relative to the actual unexpended cash balance remaining to the credit of the State General Fund, and state whether or not, in his opinion, said balance was sufficient, when combined with normal receipts for the ensuing month, to provide enough cash to pay obligations during the month at the time they are due, and if it is not sufficient, stating the amount which will be needed. The State Fiscal Officer shall also submit to the State Bond Commission, if he deems the General Fund cash balance insufficient, a statement showing cash balances in all special funds in the State Treasury which appear to have cash in excess of their immediate needs. The State Bond Commission shall immediately ascertain whether such balances are, in fact, in excess of current needs;
(b) The State Bond Commission shall issue notes as authorized hereunder in whatever amount it finds to be necessary, upon the recommendation of the State Fiscal Officer, to maintain a sufficient working balance in the General Fund; or
(c) If the State Bond Commission determines that it is not practical to issue notes at that time, or if the State Bond Commission determines it is not in the financial interests of the state to issue the notes at that time, and if the cash balance in special funds in the State Treasury in fact have cash in excess of their immediate needs, then the State Bond Commission shall, to the extent that such balances are available, make temporary loans or transfers therefrom to the General Fund. To accomplish such transfer or loan, a requisition shall be issued by the bond commission against the special fund or funds, a copy thereof to be sent to each agency responsible for the administration of the fund or funds so utilized. The State Fiscal Officer shall issue his disbursement warrants against the fund or funds in the manner prescribed in governing statutes, and shall maintain a complete record of such transfers or loans and repayments thereof. A similar but separate record shall be maintained by the State Treasurer's office, to afford a double check for the benefit of the bond commission and agencies administering any special funds involved. In the event any special fund has such a loan outstanding to the General Fund and needs the use of the money before the balance of the General Fund is sufficient to make repayment thereof, the bond commission is authorized and directed to effectuate a loan or transfer from other special fund or funds to the General Fund in an amount sufficient to make repayment, or if no other special fund balances are available, the bond commission shall immediately issue notes in the amount needed, as authorized in Section 31-17-103.
(2) It shall be the duty of the State Fiscal Officer to advise the bond commission, each month after such notes have been issued or such loans or transfers have been made, whether or not the cash balance to the credit of the State General Fund is sufficient to make full or partial payment of such obligations in addition to other current requirements, and if such is the case, the commission shall promptly issue requisitions on the State General Fund for whatever amount can be paid on such obligations without reducing the General Fund cash balance below the amount needed for current requirements during the remainder of the month; and the State Fiscal Officer shall issue his warrants accordingly. The State Treasurer shall requisition warrants, as appropriate, from the State Fiscal Officer, for the payment of interest on notes authorized hereunder and the payment of any costs authorized under Section 31-17-103.
(3) The State Bond Commission is also authorized, in the manner provided herein, to make temporary loans or transfers from special funds in the State Treasury to pay amounts authorized under Section 31-17-101 et seq., including without limitation payment of the principal of and interest on notes issued hereunder.
(4) Notes herein authorized to be issued may be reissued, and interfund loans or transfers herein authorized to be made may be remade, provided the total amount of such notes and interfund loans or transfers combined, outstanding at any one time, shall not exceed seven and one-half percent (7-1/2%) of the total appropriations made by the Legislature out of the General Fund for the fiscal year during which such notes are issued and such interfund loans or transfers are made.
(5) The State Bond Commission shall immediately send notice of any action relating to the issuance of bonds or the borrowing of money, under authority of this or any other section, to the Legislative Budget Office.
SECTION 6. Section 31-17-109, Mississippi Code of 1972, is brought forward as follows:
31-17-109. The notes herein authorized shall be sold from time to time by the commission as the needs for the proceeds thereof may arise, which sale shall be made on such terms and in such manner as may be deemed by the commission to be to the best interest of the State of Mississippi, except as herein otherwise provided.
SECTION 7. Section 31-17-111, Mississippi Code of 1972, is brought forward as follows:
31-17-111. The commission in providing for the issuance of the notes herein authorized shall have full discretion (consistent with the provisions of Section 31-17-103 hereof) in fixing the terms and details thereof, and may provide for the issuance of said notes in such form, executed in such manner and payable at such place or places, and containing such terms, covenants and provisions as said commission may, by resolution or resolutions, provide.
SECTION 8. Section 31-17-123, Mississippi Code of 1972, is brought forward as follows:
31-17-123. (1) The intent of the Legislature is to authorize borrowing funds under the provisions of Sections 31-17-101 through 31-17-123 to offset any temporary cash flow deficiencies and should not be construed to authorize the borrowing of any funds in an amount that cannot be repaid during the fiscal year in which the funds are borrowed.
(2) (a) Notwithstanding any provision of this chapter to the contrary, in the event that the State Fiscal Officer and the State Treasurer make a determination that (i) state-source special funds are not sufficient to cover deficiencies in the General Fund, (ii) the State of Mississippi is unable to repay special fund borrowing within the fiscal year in which it was borrowed, or (iii) state-source funds are insufficient for disaster support and/or assistance purposes due to Hurricanes Katrina and/or Rita; and that the State Bond Commission makes a determination that such deficiency, inability to repay, or insufficiency is the result of a state of emergency within the State of Mississippi, the State Bond Commission is authorized to obtain a line of credit, in an amount not to exceed Five Hundred Million Dollars ($500,000,000.00), from a commercial lender, investment banking group or a consortium of either, or both. The length of indebtedness under this subsection shall not extend past five (5) years following the origination of the line of credit. The line of credit shall be authorized and approved by the State Bond Commission and shall have such terms and details as may be provided by resolution of the State Bond Commission. Loan proceeds shall be received and disbursed by the State Treasurer and deposited into the Disaster Recovery Fund, a special fund hereby created in the State Treasury, and shall be used to cover deficiencies in the General Fund, to repay special fund borrowing and/or to cover any insufficiency in disaster support and/or assistance. Monies remaining in the Disaster Recovery Fund at the end of a fiscal year shall not lapse into the State General Fund, but shall remain in the Disaster Recovery Fund and any interest earned or investment earnings on amounts in the Disaster Recovery Fund shall remain in the fund.
(b) As security for the repayment of the principal and interest on the line of credit provided for in paragraph (a) of this subsection, the full faith, credit and resources of the State of Mississippi are hereby irrevocably pledged.
(c) Upon approval of the State Fiscal Officer, the Director of the Mississippi Emergency Management Agency is authorized to use amounts from the line of credit to match federal funds, and for personnel, call-back wages, base and overtime wages, travel, per diem and other out-of-pocket expenses incurred as a result of Hurricanes Katrina and/or Rita.
(d) This subsection (2) shall be complete authority for the borrowing authorized hereunder and shall not be subject to the limitations provided in the other provisions of this chapter or otherwise under state law.
(e) The State Treasurer shall notify the Legislative Budget Office and the State Department of Finance and Administration of each transfer into and out of the Disaster Recovery Fund on a quarterly basis.
SECTION 9. Section 31-17-125, Mississippi Code of 1972, is brought forward as follows:
31-17-125. This chapter, without reference to any other statute, shall be deemed to be full and complete authority for the borrowing of money and funds in the manner and for the purposes authorized hereunder, and none of the restrictions, requirements, conditions or limitations of law applicable to the issuance or sale of notes or other evidences of indebtedness or the making of any arrangements authorized hereunder shall apply and all powers necessary to be exercised in order to carry out the provision of this chapter are hereby conferred.
SECTION 10. Section 31-17-11, Mississippi Code of 1972, is brought forward as follows:
31-17-11. There is hereby created the State Bond Retirement Commission which shall be composed of the Governor, the Attorney General, and the State Treasurer. The Governor shall be the chairman of the commission, and the Attorney General shall be the secretary thereof.
SECTION 11. Section 31-17-13, Mississippi Code of 1972, is brought forward as follows:
31-17-13. It shall be the duty of the State Bond Retirement Commission to administer the State Bond Retirement Revolving Fund provided for in Section 31-17-27, and to perform such other duties as may be prescribed in Sections 31-17-27 through 31-17-43.
SECTION 12. Section 7-1-401, Mississippi Code of 1972, is brought forward as follows:
7-1-401. There is hereby created within the Bureau of Budget and Fiscal Management of the State Fiscal Management Board a division to be known as the "State Bond Advisory Division." The State Fiscal Management Board shall appoint a director, who shall have knowledge in the field of state governmental operation and of the state's fiscal and economic affairs and shall employ such other technical, professional and clerical help as he deems necessary. The director shall, before entering upon the duties of his appointment, execute a good and sufficient bond payable to the state in some surety company qualified and doing business in the State of Mississippi in the penal sum of Fifty Thousand Dollars ($50,000.00), conditioned upon the faithful performance of his duties as required by law. The premium on said bond shall be paid as the premium on the Governor's bond.
SECTION 13. Section 7-1-403, Mississippi Code of 1972, is brought forward as follows:
7-1-403. The division is hereby granted the authority and charged with the responsibility to perform the following duties:
(a) To maintain a close working relationship with agencies authorized to incur bonded indebtedness in order to know the probable schedule for the issuance of bonds so that coordination may be accomplished for orderly issuance.
(b) To require all state agencies authorized to incur bonded indebtedness, in addition to cooperation required in subsection (a), to submit written notice of intent to sell bonds at least thirty (30) days prior to requesting the State Bond Commission to approve the sale of such bonds. Such notification shall contain such information as may be required by the director. Provided, however, with the concurrence of the State Fiscal Management Board, in cases of emergency the requirement of thirty (30) days' notice may be waived by the director.
(c) To require all state agencies or political subdivisions to submit annual financial reports, and such other interim reports as deemed necessary, on projects financed by state revenue bonds or by state bonds which have the general obligation pledge of the state, but which are primarily backed by specified revenues.
(d) To maintain a complete record of all outstanding state bonds. Such record shall include, but shall not be limited to, the following: amount of principal of the bonds issued; the rates of interest; dates the bonds were issued; the term or terms of the bonds; maturities; the overall average interest rate to be paid on each issue; the name of the paying agent; the trustees named to administer the issue; the pledges securing such bonds; the statutes under which such bonds were issued and the statutory authority for all bonds authorized, whether issued or unissued.
(e) To maintain a close working relationship with the Board of Economic Development, the Research and Development Center and the Commissioner of Revenue in order to obtain current information concerning the economic, financial and growth conditions of the state and such other information necessary to properly comply with the intent of Sections 7-1-401 and 7-1-403.
(f) To receive the cooperation of all state agencies and institutions in accumulating the information required by Sections 7-1-401 and 7-1-403.
(g) To make continuing studies and investigations of government bond interest costs throughout the United States of America and to advise the Governor, the State Bond Commission and the Legislature concerning market conditions and credit condition of the state.
(h) To contract with the Central Data Processing Authority for such data processing or computer services as are necessary in providing complete, current and accurate information regarding bonds issued, maturity dates, interest costs, bond market trends and other data necessary for the proper management of the state's debt and investments of state funds.
(i) To issue rules and regulations as are necessary for the enforcement of the provisions of Sections 7-1-401 and 7-1-403.
(j) To investigate and require reports covering proposed transactions involving refunding bond issues, bond exchanges, bond trades, bond "swaps," redemptions, etc., which may be engaged in with regard to any state bond.
(k) To keep the Governor, Bond Commission and the Legislature informed regarding the credit outlook for the state and to furnish whatever information the Legislature requests which is required to be maintained under Sections 7-1-401 and 7-1-403.
(l) To maintain a personal relationship with rating agencies and state bond investors, including the responsibility to invite people in the national financial community to visit our state in order for them to better understand our undertakings, and to incur and pay all expenses in connection with the administration and function of the division, including information meetings or other appropriate forms of communication. All such expenses for these trips shall be paid from appropriations made for the operation of this division.
(m) To cooperate with and provide assistance to counties, municipalities and other political subdivisions when the respective governing authorities request such assistance regarding matters of financial and credit administration and in the preparation of materials and information required to be used in connection with credit ratings and the sale of bonds.
(n) To perform such other duties and acts necessary to carry out the intent of Sections 7-1-401 and 7-1-403.
(o) To maintain a complete record of the name and business address of any person, firm, corporation or other entity deriving any income for services performed with respect to any bonds issued after the effective date of Senate Bill No. 3154, 1988 Regular Session, by the State Bond Commission, State Development Bank, Mississippi Housing Finance Corporation, Certified Development Company of Mississippi, Inc., Mississippi Hospital Equipment and Facilities Authority or any other entity issuing bonds or notes of the State of Mississippi. The report shall specify the amount of funds, whether from bond proceeds or otherwise, paid or to be paid to each such person or entity for services performed for each such bond issue. The initial report shall be made available on or before January 15, 1989, to the Clerk of the House of Representatives and to the Secretary of the Senate. All subsequent updated reports shall be furnished on or before January 15 of each year in the manner provided in this paragraph. The State Bond Attorney shall annually compile a list of all local bond issues, itemizing the name of the issuer, a description of the issue, the amount of the bonds issued and the name and address of the person acting as bond counsel on the issue. Such list shall be submitted on or before January 15 of each year to the Clerk of the House of Representatives, the Secretary of the Senate and the Joint Performance Evaluation and Expenditure Review Committee (PEER).
SECTION 14. The provisions of Section 31-17-101 as amended by Section 1 of this act shall apply only to state bonds authorized to be issued by acts of the Legislature that are enacted on or after the effective date of this act.
SECTION 15. This act shall take effect and be in force from and after its passage.